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Wednesday, November 24, 2010

Warehouse stores and whose fault is it, anyway??

In my never-ending interest of all things economic, an article in Time magazine highlighting two new books about the current financial crisis caught my eye. The titles of the two books are: The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--and Spawned a Global Crisis and The Devils are all Here. Of course, both books claim to be fair and balanced accounts, but from reading this article and the actual author tidbits on Amazon, it is obvious that most of the blame is placed on the greedy lenders/bankers/wall-streeters. There is no doubt that there is a great deal of truth there, but what aggravates me the most is the lack of blame placed on all the greedy buyers who wanted houses that were simply too much for them to afford.

Case in point: Mike and I have purchased 4 homes in the last 15 years--we still own two of them. Without exception, every time we bought, our lenders qualified us for more than we were comfortable borrowing and our realtors insisted on showing us homes that were in that price range. But we were undeterred!! We insisted on buying a home far below what we were told we could have because we didn't want huge payments. It's that easy!! Any thoughts on this??

Another interesting article in the Wall Street Journal highlighted what they call the "just-in-time consumer;" that is, more and more shoppers are buying only what they need, when they need it. Apparently warehouse stores like Sams and Costco are feeling the hit and are offering items in smaller package sizes. I can see both sides of this one. While I most admittedly will buy items that are free after rebate even if I don't need them right then, I've also never been a big proponent of the warehouse store. In fact, I let my Sam's Club card expire several years ago. I have found - with very few exceptions - that Aldi prices and Wal-Mart prices combined with coupons beat warehouse prices hand's down. I also don't have the storage space for gallon size tubs of ranch dressing. When do I stock pile? When there is an unbeatable deal. If I can get peanut butter for 50 cents a jar with a coupon (thus beating the warehouse price per ounce), I'll get 5 or 6 jars, but not 20. There will be another sale. As I've blogged about before, the way I make sure to use up what I have is by shopping hardly at all right before (about 3 weeks) we go to Maine in the summer and eating up all we have on hand. I also periodically give to food drives, which keeps my pantry cleaned out. The good news: 93% of consumers say that they expect to continue spending cautiously even when the economy improves. We'll see if that holds true...